This paper emphasizes the importance and role of business ethics and ethical leadership in business organizations. The purposes and principles of business ethics and ethical leadership are stated and the main characteristics of ethical leaders are described. The goal of this paper is to make a conclusion about the importance of implementing business ethics in organizations, and emphasize the role of ethical leadership and leaders. Furthermore, paper discusses the complexity of ethics, and ways of improving it. Also, in the paper are highlighted consequences of making unethical decisions are highlighted, and how much they can cost organization. Many companies and leaders have recognized the importance of ethics and it is increasingly being implemented in organizations with the goal of improving business and interpersonal relationships. Leaders are the ones who have the greatest responsibility for transferring ethics on their followers in order to create long-term business success. Behaving ethically in all situations, leaders will gain the trust of employees. In the paper was conducted research on ethical rules in the workplace, the goal was also to find out their attitudes and opinions towards superiors when it comes to ethical behavior in the organization. The research has shown that ethics is well implemented in organizations in the Republic of Croatia, and that in total employees have positive attitudes toward their leaders.